China has taken the first step in initiating a trade dispute with Türkiye at the World Trade Organization over its tariffs on imports of electric vehicles, the Chinese Foreign Ministry said in a statement on Tuesday.
“The discriminatory measure taken by Turkiye is against WTO rules, and is protectionist in nature. We urge Türkiye to follow WTO rules and immediately correct its measures,” the statement said.
The Turkish government did not immediately respond to a request for comment.
The “request for consultations” filed by China to the WTO is the first formal step in a trade dispute, and sometimes disputes are resolved at this stage.
As it intensifies the push for local production, Türkiye recently announced it would impose strict conditions on the import of plug-in passenger and commercial hybrid vehicles from some countries, including China.
The decision was announced late in September in the country's Official Gazette, taking effect in 30 days and follows a decision in June to limit imports of electric vehicles.
China has faced widespread criticism over its vehicle exports, which many countries claim are heavily subsidized by Beijing.
The European Union in a widely divided move approved last Friday tariffs on electric vehicles manufactured in China, although talks between the duo are expected to continue to find a solution.
Analysts say Ankara is seeking to increase pressure on Chinese carmakers with which it is holding talks about investing in production in Türkiye.
The Chinese-Turkish escalation comes although a Turkish official said his country is in the final stages of talks on a possible investment by Chinese car maker Chery.
Ankara seeks to deepen its ties with Chinese car makers after reaching an investment deal with China's BYD earlier this year.
The Turkish official, who spoke on condition of anonymity late on Monday, did not specify the investment Chery and Ankara were discussing or whether there was a timeline for reaching a final agreement.
In July, Ankara said Chinese electric vehicle manufacturer BYD agreed to build a $1 billion production plant in Türkiye with an annual capacity of 150,000 vehicles.
Türkiye’s presidency said on Saturday that President Recep Tayyip Erdogan had met Chery International President Guibing Zhang on the sidelines of an investment event in Istanbul. Industry and Technology Minister Mehmet Fatih Kacir also attended the talks.
Chery was not immediately available for comment.
Türkiye provides land allocation, extensive tax breaks and various supports for new plug-in hybrid and electric vehicle plant investments.
The investment support program requires minimum 150,000 unit per year production and also allows the investor to sell a set number of cars in local market tariff free.
The country, home to manufacturing facilities of Ford, Stellantis, Renault, Toyota and Hyundai could produce up to 2 million vehicles annually, with a third of the capacity allocated to commercial vehicles, according to data from automotive manufacturers associations.
The Turkish government has been courting Chinese manufacturers to broaden its manufacturing base and accelerate the transition of its automotive industry into electric cars.
